Straight to the Source! Are you talking with the factory owner?

Straight to the Source! Are you talking with the factory owner?

How can you tell if you are talking with the factory owner? You want to go straight to the source to find out about the production of your products.

You might ask him ... “How many of your employees are from Hunan province?  How many from Sichuan?  How many from Guangdong?”

The trading companies that represent these factories, they’re not on the ground of the factory day to day, they’re not going to have those details.  I love to get into a very detailed discussion with someone that’s telling me that they are the factory owner.  And I’ll find out really quickly if they know their stuff or not.

Polished English skills do not reflect production skills

Also, be aware that polished English skills do not reflect production skills.  Often the most polished websites are set up by trading companies.  Trading companies often have staff that speak fluent English.  They’ve been educated overseas.  They know what the buyer wants because they’re dealing with foreign buyers day to day.  The factories, they might have excellent engineering and production, but they don’t have a marketing team, they don’t have an international sales force.  They’re not as polished in terms of the interface with foreign buyers, but they make a great widget at a great price.  Don't confuse language ability with production ability.

FAQ for Due Diligence

The two reports are designed to complement each other and it is recommended you conduct both forms of due diligence on new suppliers.  By engaging both reports, you will protect yourself from both possible pitfalls:

Danger One:  A legit business issues you a bad deal.

Danger Two: A scam/fake/unlicensed business issues you what appears to be a fair deal.

Because a legit company could issue unfair terms of trade in your particular deal, it is important to evaluate both the company and the given transaction.

More to come soon in our Middlemen series ...

About the Author: Michael J. Bellamy

About the Author: Michael J. Bellamy

Originally from Upstate New York, Mike moved to Asia in 1993 and is a China business advisor to both Fortune 500 companies and small businesses.  Recognized as an expert on doing business in China, he has been interviewed by WSJ, CNBC, FT & Bloomberg.

A featured presenter on China issues at seminars, trade shows and corporate events across the globe.

Learn more about Mike and AsiaBridge Law at
https://www.asiabridgelaw.com/business-advisory-services/

Mike is the author of “The Essential Reference Guide to China Sourcing
(available on Amazon).

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